The saviour of St Michael

It was at this year's Christmas drinks for the press hosted by Marks and Spencer that Stuart Rose showed he was finally relaxing. Never short of a compliment for a female journalist, he sauntered up to one especially glamorous hackette and began to coo over the dress she was wearing. 'It's fabulous,' he gushed. 'Is it a Diane von Furstenberg?' 'Actually,' came the amused reply, 'it's from M&S. I bought it last week.'

The anecdote reveals a couple of things about the Rose method. The first, of course, is his famous charm. The second is the success of his efforts to make M&S fashionable again.

M&S seems to be everywhere right now. Elizabeth Jagger, Twiggy, Laura Bailey and even Shirley Bassey have lent their glamour to the high-street stalwart in a series of high-profile TV ads. Its womenswear has been flying off the shelves - as have its chocolate puddings, thanks to its equally successful 'This isn't just food...' campaign.

The retailer is winning plaudits in the City as well as from customers. Last month it announced half-year profits up 32 per cent to £405m, its best figure for nine years. Its stores recorded some 19 million extra shopping visits and M&S is getting close to the magic £1bn profit mark for the full year.

Early indications are that Christmas sales have been good, and if the results boost Rose's £2m-plus pay packet, few are likely to complain. It is only two years since M&S was in a period of almost unprecedented crisis after years of decline sparked a bad-tempered takeover war involving Philip Green, the Arcadia billionaire.

Rose, 57, was parachuted into the chief executive's hot seat to defend M&S against Green's hostile bid - much to the fury of the retail tycoon, with whom Rose had previously worked. Rose succeeded in persuading shareholders that better times lay ahead, but many believed his goal of rebuilding M&S was an impossible one. Today, though, M&S's share price is comfortably above 700p, vindicating the decision not to succumb to Green's 400p offer.

Prudently, Rose still declines to declare that the company's recovery is complete, but today's healthy trading must be gratifying for a man who started his career on the M&S shop floor. With hindsight, it seems a surprisingly humble beginning for someone generally agreed to be one of the smoothest and most debonair bosses in the FTSE.

He made his name, however, in a series of high-pressure jobs at other distribution-orientated retailers in the 1990s - Argos, Booker and Arcadia - where he proved he was a master of logistics: the key factor, now more than ever, in successful mass shopkeeping. At Arcadia, he earned a big boost for its shareholders - and a multi-million-pound payout for himself - after presiding over a bidding war in which Baugur, the Icelandic retailer, was trumped by Philip Green.

It was the Arcadia episode that created an impression of friendliness between Green and Rose, although relations, it now transpires, were never excessively cordial. Even so, Green took mighty umbrage when he next encountered Rose - fighting on the other side during the battle for M&S.

Green seems to have had Rose in mind as a chairman if his bid had succeeded. Rose was living in what looked like comfortable semi-retirement, and such a prestigious non-executive job might have seemed tempting. But Rose had other ideas.

Recruited to defend M&S, his partnership with chairman Paul Myners (also chairman of Guardian Media Group, owner of The Observer) impressed the City and proved an immovable block to Green's ambitions. The struggle got nasty, with a mysterious incident in which it was suggested that someone was hacking into Rose's mobile phone account, and a bizarre episode in which he and Green half-tussled during a chance meeting on a London street.

Green has had mixed fortunes since then. In 2002 he was able to pay himself a record-breaking £1.2bn dividend, but sales figures suggest his Arcadia and BHS empire is suffering from the general high street malaise. It seems unlikely that his plans for restoring M&S would have surpassed Rose's.

The challenge facing Rose in 2004 was formidable. M&S's 1990s heyday under Sir Richard Greenbury already seemed like a distant memory. More recent bosses, Roger Holmes and Luc Vandevelde, had been forced out, and the board was rumoured to be riven by infighting. More serious was that the company's reputation for reliable and affordable quality had withered in the early years of this decade as its increasingly scruffy stores became better known for clothes that one fashion writer condemned as 'either slutty or frumpy'.

Nor has it all been plain sailing since Rose took charge. As he grappled with M&S's difficulties, the earliest financial results of his tenure were poor. He argued with George Davies, the Per Una designer then seen as M&S's best remaining asset. Myners departed after non-executive director Kevin Lomax objected to the chairman's closeness to Rose.

Since the second half of 2005, however, and especially after positive Christmas trading last year, Rose's efforts have been paying off. He instigated a beautification of the stores that continues, and simplified the procurement process so that new garments could be introduced quickly. M&S has put itself into a position where it can compete with 'fast fashion' retailers such as Mango and Next.

The trick, it seems, was to immerse himself in the operational details. When he took over, Rose declared that he would spend three days each week looking at merchandise and one day in the stores: 'The days when chief executives sat in their gilded cages and their ship cruised along and someone reported to them that there were "no icebergs in sight, sir" are gone. I'm up on the bridge now looking for the iceberg; that's the difference.'

There have been improvements on almost every front. In the three months to the end of September, like-for-like sales were up 4.7 per cent for food and an especially pleasing 7.9 per cent for general merchandise, including clothing. Areas of former dominance, such as childrenswear and lingerie, have recovered and M&S once again commands more than 10 per cent of Britain's womenswear market. Fashionistas are singing M&S's praises.

Image is everything in retail. As well as Twiggy and co, Rose has had help from Kate Bostock, the former Asda manager who looks after womenswear, and from marketing chief Steve Sharp, the brains behind M&S's clever advertising. Sharp, creator of the 'Your M&S' slogan, is also masterminding the company's push to capitalise on a growing public appetite for 'ethical' shopping.

'We have one huge advantage that others have not: we are 99 per cent own-label,' Rose said earlier this year. 'We can lay down standards and take a stance on everything, from working conditions to hydrogenated fats.'

For the future, Rose has plenty of decisions to make. An expansion of outlets has been agreed in principle. Might M&S go for an acquisition? Will it try to tap the growing middle classes of China and India, or return to that graveyard of British retailers, the United States?

And what about Rose himself? Might he stay beyond the five years to which he committed in 2004? For now, he professes to be most concerned about making sure M&S's apparent recovery is the real thing.

'In 2007 there are going to be winners and losers and I hope we will be winners,' he said at those Christmas drinks. 'That's all I can say', he added, with a nod towards his PR adviser, 'because the thought police are watching.'

The CV

Name Stuart Alan Ransom Rose

Born 17 March 1949

Education Schools in Dar-es-Salaam and York

Family Married to Jennifer; one son, one daughter

Interests Flying, wine, jogging

Other jobs Non-executive director, Land Securities; chairman, British Fashion Council